Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family X has income of $100,000 while Family Y has income of $40,000. The marginal tax rates faced by the two families are

A. 30 percent on X and 20 percent on Y.
B. 40 percent on X and 10 percent on Y.
C. 30 percent on X and 30 percent on Y.
D. 40 percent on X and 20 percent on Y.


Answer: D

Economics

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